Historical Background

Square Pharmaceuticals Limited is the largest pharmaceutical company in Bangladesh and has been constantly playing the leading role among all national and multinational companies since 1985. It was established in 1958 initially as a partnership and was converted into a public limited company in 1991. In the year 1998, Square Pharmaceuticals was awarded with the ISO-9001 award for excellence in performance. The vision of Square Pharmaceuticals is to view business as a means to the material and social wellbeing of the entire society at large, leading to accumulation of wealth through financial and moral gains. The mission of the organization is to produce and provide quality & innovative healthcare relief for people, maintain stringently ethical standard in business operation besides ensuring benefit to the shareholders, stakeholders and the society at large. Speaking of objectives, Square Pharmaceuticals attempts to conduct transparent business operation based on market mechanism within the legal & social frame work with aims to attain the mission reflected by the vision. To be precise, the vision; mission and objectives are composed to emphasize on the quality of product, process and services leading to growth of the company incooperated with good governance practices. Besides the establishment of the above mentioned issues, Square Pharmaceuticals has adopted the principles of Global Compact initiated by the United Nations, which mainly focuses on significant subjects like: Human Rights, so that their businesses should support the protection of internationally proclaimed human rights; Labour Standards, to ensure the elimination of all sorts of discriminations; Environment, for encouraging the development of eco-friendly technologies and Ethical Standards, so that their businesses work against corruption in all its forms, including extortion and bribery.

Product Profiles
The formulation plants belonging to the Square Pharmaceuticals are producing a wide range of dosage forms like the ones mentioned below : Tablets: Non-Coated (plain, chewable, dispersible, vaginal), Coated (sugar coated, film coated, enteric coated), Sustained/Extended Released (coated, non coated) Capsules: Granulated Material filled, Pellets Filled Suppositories: Suppocire based Injections: Vials containing Dry Powder for Injections, Small Volume Liquid Parenterals Liquids: Oral Syrups (Sugar based, Non-Sugar based), Oral Suspensions, Topical Liquids Spray, Drops, Ointment, Cream and Powder: Small Volume Sterile Eye & Ear Drops, Small Volume Nasal Drops & Sprays, Topical Ointments & Creams, Topical Antibiotic Powder Oral Dry Powders: Dry Suspensions (Antibiotic & Anti Infectives), Dry Syrups (Antibiotics) Dry Powder Inhalers: Partial Filled (Premix) Capsules for Respiratory Tract Application with a Device Metered Dose Inhalers: Pressurized Canisters for Oral use with an Actuator Prefilled Syringe Injection: The advanced parenteral technology

Competitive Status
According to the reports of the year 2009, Square Pharmaceuticals Limited secured the top position in market share, as its sales reached BDT 10.70 billion, which is 19.5% of the entire market, as the country's total sales of the pharmaceuticals product was BDT 55.0 billion. Taking a market share of 7.72%, Square Pharmaceuticals has grown by 27.15% in the year 2009. Then comes Incepta Pharmaceuticals, which was founded in 1999, whose sales was BDT 4.52 billion, by the result of which it grabbed the second position in the pharmaceuticals industry and a market share of 8.24% in the year 2009. Despite the fact that Incepta secured the second position, but there is a wide margin in the performance of Incepta and that of Square Pharmaceuticals. Reports say that amongst the country's top 10 pharmaceutical companies, the position of Beximco Pharmaceuticals was the third in terms of sales, as according to the reports of 2009, its total sales was BDT 4.2 billion, and as a consequence of that, Beximco Pharmaceuticals occupied a market share of 7.72% during that specific period. 2

The fifth position was taken up by Opsonin Pharmaceuticals, as its sales reached BDT 2.61 billion during the year 2009 and its market share of 4.76%. The next position, that is the sixth one was acquired by Eskayef Pharmaceuticals, with a sales of BDT 2.52 billion, as a result of which the organization grabbed a market share of 4.59%. Reneta Pharmaceuticals secured the seventh position in the year 2009, as their sales reached a sum of approximately BDT 2.50 billion during that year, while its market share was 4.54%. Advance Chemical Industries, shortly and popularly known as ACI, acquired the eighth position in the country's market for pharmaceuticals products, with sales of a sum of BDT 2.46 billion, winning a market share of 4.48%. The competitive status of Square Pharmaceuticals among the respective industry along with its competitors is shown below with the help of pie diagram:

Market Share
0% 0% 0% 0% Square 19%

Others 44%

Incepta 8%

Beximco 7% Opsonin 5% ACI 4% Reneta 4% Eskayef 4%

Other Foreign 2% Novertis 3%

Trends Of Performance
Square Pharmaceuticals Ltd: Square Pharmaceuticals Limited is an organization with equal emphasis on Leadership, Technology, Quality and Passion. Square Pharmaceuticals Ltd. is the leading branded generic pharmaceutical manufacturer in Bangladesh producing quality essential and other ethical drugs and medicines. It was established in 1958 and has been continuously in the 1st position among all national and multinational companies since 1985. And now Square Pharmaceuticals is set on becoming a high performance global player in the field. Square Pharmaceuticals has invested in state of the art formulation plants aligned to regulated market standards. Four plants based on the Dhaka site can produce pharmaceutical products to the highest GMP specifications. These plants have been designed by internationally recognized firms and equipped with the best machines that can currently be found on the European and US markets. Business level strategies developed by Square help the organization to earn competitive advantage through quality products, superior services, and outstanding customer relationship. Innovation strategies have been the key to their success both in product differentiation and in product promotion. Square has been among the pioneers to bring Marketing Approach rather than traditional way of selling approach in local pharmaceuticals industry. Square also believes in Focus Strategy and concentrates on a particular segment of the market. They strive to retain existing customers as well as to attract new ones. Square Pharmaceuticals has developed exclusive customer service through its impartial medical service. Square has also developed superior human resource for earning competitive advantage in the market. Recently Square Pharmaceuticals has started manufacturing of insulin maintaining quality standards of US FDA & MHRA. The top management is dedicated hormone & steroid products manufacturing facility complying with the current Good Manufacturing Practice (cGMP) of WHO, US FDA & UK MHRA starts operation. The organization ensures strict compliance with WHO cGMP standards and local regulatory norms in every phase of sourcing & procuring quality materials, manufacturing, quality assurance and delivery of medicines. They also ensure all activities through documented Quality Management System (QMS) complying International Standard requirements of ISO 9001 through continuously developing human resources by regular training and participation. Lastly, Square is committed to undertake appropriate review, evaluation and performance measurement of processes, business activities and Quality Management System for continual improvement to ensure highest standard, customer satisfaction, developing human resources and company's growth.

Trends of Production 2006 Sales Revenue Cost of Goods Trends of Productivity RATIO ANALYSIS Financial Years Formula 2006 2007 2008 2009 Units
7,085,553,149/= 3,525,402,669/=

2007
8,711,034,758/= 4,268,447,662/=

2008
9,565,715,902/= 4,856,061,933/=

2009
1,136,659,7928/= 5,672,565,973/=

Return Of Assets and Equity Return on Total Assets (ROA) Return on Equity (ROE)

Net Profit / Total Asset Net Profit / Stockholders Equity

4.67% 4.92% 5.31% 7.52% Percentile

3.58% 4.74% 5.23% 8.28% Percentile

Investors' Ratio Earnings Per Share (EPS) Price/Earnings Ratio Profit After Tax/ Total Common Stocks 6.17 6.50 8.33 10.80 Currency

Share Price / EPS

23.25

36.40

44.73

52.01 Times

Trends of Profit & Profitability: RATIO ANALYSIS Financial Years Formula 2006 Profitability Ratio
Gross Profit Margin Operating Profit Margin Net Profit Margin

Units 2009

2007

2008

Gross Profit / Sales

58.89%

67.29%

79.06%

85.30%

Percentile

Operating Profit /Sales Net Profit / Sales

43.20% 19.20%

57.57% 23.83%

54.91% 29.60%

59.20% 32.3%

Percentile Percentile

Factors Influencing Performance

The factors that influence the performance of Square Pharmaceuticals can be categorized into two sets, depending on the genre of role that they play. The two genres are stated below: Positive Factors Square Pharmaceuticals is capable of ensuring superior quality products, which facilitates in raising the level of sales, eventually which helps to maintain the standard of products. Thus, the organization enjoys an excellent circle of supremacy. The Research & Development sector of Square Pharmaceuticals engages in widespread study regarding the development of advanced products, which influences the performance in a positive direction. Possessing a unique distribution system with the ability of enabling affirmative changes as soon as possible also plays activist role in the performance of the organization. Lastly, a skilled and stimulated workforce in due course takes part in bringing excellence in the performance of Square Pharmaceuticals. Negative Factors Besides playing as a positive force in course of performance of Square Pharmaceuticals, the maintenance of premium quality products also has got a negative side of charging a comparatively higher price than the cheap products in circulation. This might bring fall in level of sales, which ultimately plays negative role in performance. Although the organization plays the leading role in the respective industry, but there are other significant companies which are comparatively new but has excelled in a short period of time. This should be taken with much importance by Square Pharmaceuticals to sustain its legacy. To some extent, Square Pharmaceuticals largely depends on raw materials that are imported, which are high in price. This eventually brings a rise in the price of products manufactured by Square, which definitely creates a lull in the performance. Therefore the organization needs to put emphasize on the issue.

SWOT Analysis
The strengths, weaknesses, opportunities and threats of the organization, those are sorted out after an extensive study, are mentioned below: Strengths Capability of ensuring quality products Holding a labour force that is skilled and motivated Assurance of a company portfolio which is universally spread Possession of a distribution channel that is well built Presence of an extensive R&D sector Existence of a refined production process Capability of leading the pharmaceuticals industry Opportunity to promote products through Square Hospitals

Weaknesses Cheap products are the most popular ones than quality goods A large number of people are still not aware of quality products A high price is charged than the non branded yet popular products as a consequence of maintenance of quality Opportunities The potential consumers are getting more conscious day by day Enormous opportunity of promoting the superior products in the underdeveloped regions of Africa The potential market for pharmaceutical products in Bangladesh is dominated by the local producers Threats Production cost for these products went high because of increase in price of raw materials in the international market The interest shown by foreign companies regarding investing in Bangladesh draws a frightening picture for locally produced pharmaceutical products A large segment of people is dependent on herbal medicines which hampers the sales. 7

Possible Measures To Improve Performance

Certain steps need to be taken to attain betterment in the performance of Square Pharmaceuticals, which are discussed below: Square Pharmaceuticals possesses some drawbacks, among which a significant one is is that the price is comparatively higher than other brands. As a result the section of the customers who are potential yet sensitive towards price gets offered with the other brands, whose products are low in price. Square would be capable of capturing wider segment of consumers if they lower the prices. Cost of Equity is higher than the cost of the bank borrowings fund. As a result the cost of production is also being affected by that. A suitable adjustment within equity and loan may reduce the long term borrowing cost. Establishment of individual selling points besides the dealers is necessary, as it has been noticed in some of the cases that if they can establish their own selling points besides the dealers, it will ultimately facilitate them to endorse their products. Most of the raw materials used in producing the pharmaceutical products are imported from the European countries at a high price. If the same quality raw materials are processed in Bangladesh or if imported from nearby locations, then the fright and material cost can be utilized otherwise. Campaigning in rural areas is necessary for attracting the potential customers residing in those places, so that they switch to advanced products rather depending on the herbal stuffs.

Concluding Remarks
Square Pharmaceuticals has been performing a noteworthy role in the pharmaceuticals industry of Bangladesh since an elongated period, which proves that the organization is aware of its positive and negative forces. However, the management needs to focus on their internal strengths like ensuring quality products and strengthening the distribution channel and the R&D sector, besides emphasizing on external opportunities; for example exploring the potential markets of African and Latin American underdeveloped countries. In addition, the organization also needs to think of ways to get rid of their weaknesses like depending on raw materials that are imported at a high price, which in turn increases the price of their products. Thus it can be concluded by saying that, Square Pharmaceuticals can continue ruling the pharmaceuticals industry sector of Bangladesh by taking only a few steps, as the top management is quite aware of the status of the organization.